**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**———————————**

**FORM      10-Q**

| x |   | **QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|---|--------|------------------------------------------------------------------------------------------------------------------------------------------|

**For      the Quarterly Period Ended June 30, 2006**

**OR**

| ྑ |   | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |
|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

**For      the transition period from _______________ to      _______________**

**Commission      File Number 000-30707**

**First      Northern Community Bancorp**

| **California**                                                                | **68-0450397**                                         |
|-------------------------------------------------------------------------------|--------------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization) | (I.R.S.                Employer Identification Number) |

| **195                N. First Street, Dixon, CA**       | **95620**                 |
|---------------------------------------------------------|---------------------------|
| (Address                of principal executive offices) | (Zip                Code) |

**707-678-3041**

| **Yes**x | **No** ̈** ** |
|----------|------------------------|

** **

| **Large                accelerated filer** ̈ | **Accelerated                filer**x | **Non-accelerated                filer** ̈ |
|--------------------------------------------------|---------------------------------------|------------------------------------------------|

| **Yes** ̈ | **No**x |
|---------------|---------|

----

**FIRST      NORTHERN COMMUNITY BANCORP**

**INDEX**

|                                             |   | **Page**                                                                                                   |
|--------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------|
|                                             |   |                                                                                                       |
| **PART                I: FINANCIAL INFORMATION** |   |                                                                                                       |
|                                             |   |                                                                                                       |   |   |
| Item                1                            |   | Financial                Statements—Unaudited                                                        |   |   |
|                                             |   |                                                                                                       |   |   |
|                                             |   | Condensed                Consolidated Balance Sheets                                                       |   | 3 |
|                                             |   |                                                                                                       |   |   |
|                                             |   | Condensed                Consolidated Statements of Income                                                 |   | 4 |
|                                             |   |                                                                                                       |   |   |
|                                             |   | Condensed                Consolidated Statement of Stockholders’ Equity and Comprehensive Income     |   | 5 |
|                                             |   |                                                                                                       |   |   |
|                                             |   | Condensed                Consolidated Statements of Cash Flows                                             |   | 6 |
|                                             |   |                                                                                                       |   |   |
|                                             |   | Notes                to Unaudited Condensed Consolidated Financial Statements                              |   | 7 |
|                                             |   |                                                                                                       |   |   |
| Item                2                            |   | Management’s                Discussion and Analysis of Financial Condition and Results of Operations |   | 15 |
|                                             |   |                                                                                                       |   |   |
| Item                3                            |   | Quantitative                and Qualitative Disclosures About Market Risk                                  |   | 28 |
|                                             |   |                                                                                                       |   |   |
| Item                4                            |   | Controls                and Procedures                                                                     |   | 28 |
|                                             |   |                                                                                                       |   |   |
| **PART                II: OTHER INFORMATION**    |   |                                                                                                       |
|                                             |   |                                                                                                       |   |   |
| Item                1A                           |   | Risk                Factors                                                                                |   | 28 |
|                                             |   |                                                                                                       |   |   |
| Item                2                            |   | Unregistered                Sales of Equity Securities and Use of Proceeds                                 |   | 29 |
|                                             |   |                                                                                                       |   |   |
| Item                4                            |   | Submission                of Matters to a Vote of Security Holders                                         |   | 30 |
|                                             |   |                                                                                                       |   |   |
| Item                6                            |   | Exhibits                                                                                                   |   | 31 |
|                                             |   |                                                                                                       |   |   |
|                                             |   | Signatures                                                                                                 |   | 31 |

----

**PART      I - FINANCIAL INFORMATION**

**ITEM      1.**

**CONSOLIDATED      FINANCIAL STATEMENTS**

***CONDENSED      CONSOLIDATED BALANCE SHEETS***

|                                                                                                                                                                   |   | (UNAUDITED)                  |    |                             |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|----------------------------------|--------|
|                                                                                                                                                                   |   | June                30, 2006 |    | December                31, 2005 |   |
| ASSETS                                                                                                                                                                 |   |                         |    |                             |   |
| Cash                and due from banks                                                                                                                                 |   | $                            | 30,875  |                             | $      | 35,507 |   |
| Federal                funds sold                                                                                                                                      |   |                         | 36,430  |                             |   | 87,185 |   |
| Investment                securities - available for sale                                                                                                              |   |                         | 70,079  |                             |   | 48,788 |   |
| Loans,                net of allowance for loan losses of                                                                                                              |   |                         |    |                             |   |   |   |
| $7,923                at June 30, 2006 and $7,917 at December 31, 2005                                                                                                 |   |                         | 480,173 |                             |   | 456,061 |   |
| Loans                held-for-sale                                                                                                                                     |   |                         | 5,095   |                             |   | 4,440 |   |
| Premises                and equipment, net                                                                                                                             |   |                         | 8,118   |                             |   | 8,311 |   |
| Other                Real Estate Owned                                                                                                                                 |   |                         | — |                             |   | 268 |   |
| Accrued                Interest receivable and other assets                                                                                                            |   |                         | 21,764  |                             |   | 20,087 |   |
|        TOTAL ASSETS                                                                                                            |   | $                            | 652,534 |                             | $      | 660,647 |   |
|                                                                                                                                                                   |   |                         |    |                             |   |   |   |
| LIABILITIES                AND STOCKHOLDERS' EQUITY                                                                                                                    |   |                         |    |                             |   |   |   |
| Liabilities                                                                                                                                                            |   |                         |    |                             |   |   |   |
| Deposits                                                                                                                                                               |   |                         |    |                             |   |   |   |
| Demand                                                                                                                                                                 |   | $                            | 179,984 |                             | $      | 192,436 |   |
| Interest-bearing                transaction deposits                                                                                                                   |   |                         | 86,120  |                             |   | 85,560 |   |
| Savings                & MMDA's                                                                                                                                    |   |                         | 190,796 |                             |   | 185,878 |   |
| Time,                under $100,000                                                                                                                                    |   |                         | 50,030  |                             |   | 51,921 |   |
| Time,                $100,000 and over                                                                                                                                 |   |                         | 69,534  |                             |   | 65,986 |   |
|        Total deposits                                                                                                          |   |                         | 576,464 |                             |   | 581,781 |   |
| FHLB                Advance and other borrowings                                                                                                                       |   |                         | 11,657  |                             |   | 14,969 |   |
| Accrued                interest payable and other liabilities                                                                                                          |   |                         | 5,839   |                             |   | 7,095 |   |
|        TOTAL LIABILITIES                                                                                                       |   |                         | 593,960 |                             |   | 603,845 |   |
|                                                                                                                                                                   |   |                         |    |                             |   |   |   |
| Stockholders'                equity                                                                                                                                    |   |                         |    |                             |   |   |   |
| Common                stock, no par value; 16,000,000 shares authorized;                                                                                               |   |                         |    |                             |   |   |   |
| 7,988,050                shares issued and outstanding at June 30, 2006 and 7,558,759 shares                issued                and outstanding at December 31, 2005 |   |                         | 46,296  |                             |   | 36,100 |   |
| Additional                paid in capital                                                                                                                              |   |                         | 977     |                             |   | 977 |   |
| Retained                earnings                                                                                                                                       |   |                         | 11,762  |                             |   | 19,606 |   |
| Accumulated                other comprehensive (loss) income                                                                                                           |   |                         | (461    | )                                |   | 119 |   |
|        TOTAL STOCKHOLDERS' EQUITY                                                                                         |   |                         | 58,574  |                             |   | 56,802 |   |
|                                                                                                                                                                   |   |                         |    |                             |   |   |   |
|        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                               |   | $                            | 652,534 |                             | $      | 660,647 |   |

----

***UNAUDITED      CONDENSED CONSOLIDATED STATEMENTS OF INCOME***

| .                                                                                                                                                                    |   | Three                months                                                                                                                                             |   | Three                months                                                                                                                                                              |   | Six                months                                                                                                                                                     |   | Six                months                                                                                                                                                     |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                 |   | ended                                                                                                                                                                   |   | ended                                                                                                                                                                                    |   | ended                                                                                                                                                                         |   | ended                                                                                                                                                                         |   |
|                                                                                                                                                                 |   | June                30, 2006                                                                                                                                            |   | June                30, 2005                                                                                                                                                             |   | June                30, 2006                                                                                                                                                  |   | June                30, 2005                                                                                                                                                  |   |
| Interest Income                                                                                                                                                 |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |
|      Loans                                                                                                                                  |   | $                                        10,435 |   | $                                           8,895 |   | $                                         20,119 |   | $                                         16,917 |   |
|      Federal funds sold                                                                                                           |   |  651                                                                                                                                                               |   |  479                                                                                                                                                                                |   |  1,611                                                                                                                                                                   |   |  931                                                                                                                                                                     |   |
|      Investment securities                                                                                                             |   |                                                                                                                                                               |   |                                                                                                                                                                                |   |                                                                                                                                                                     |   |                                                                                                                                                                     |   |
|           Taxable                                                                                                  |   |  667                                                                                                                                                               |   |  504                                                                                                                                                                                |   |  1,223                                                                                                                                                                   |   |  1,037                                                                                                                                                                   |   |
|           Non-taxable                                                                                              |   |  143                                                                                                                                                               |   |  144                                                                                                                                                                                |   |  274                                                                                                                                                                     |   |  291                                                                                                                                                                     |   |
|                Total interest income                                            |   |  11,896                                                                                                                                                            |   |  10,022                                                                                                                                                                             |   |  23,227                                                                                                                                                                  |   |  19,176                                                                                                                                                                  |   |
|                                                                                                                                                                 |   |                                                                                                                                                               |   |                                                                                                                                                                                |   |                                                                                                                                                                     |   |                                                                                                                                                                     |   |
| Interest Expense                                                                                                                                                |   |                                                                                                                                                               |   |                                                                                                                                                                                |   |                                                                                                                                                                     |   |                                                                                                                                                                     |   |
|      Deposits                                                                                                                               |   |  2,038                                                                                                                                                             |   |  1,166                                                                                                                                                                              |   |  3,843                                                                                                                                                                   |   |  2,111                                                                                                                                                                   |   |
|      Other borrowings                                                                                                                  |   |  82                                                                                                                                                                |   |  125                                                                                                                                                                                |   |  216                                                                                                                                                                     |   |  248                                                                                                                                                                     |   |
|                Total interest expense                                           |   |                                                                                                                                                                    | 2,120  |                                                                                                                                                                                     |   | 1,291                                                                                                                                                                         |   |                                                                                                                                                                          | 4,059  |   |   | 2,359 |   |
|                Net interest income                                              |   |                                                                                                                                                                    | 9,776  |                                                                                                                                                                                     |   | 8,731                                                                                                                                                                         |   |                                                                                                                                                                          | 19,168 |   |   | 16,817 |   |
| (Recovery                of) provision for loan losses                                                                                           |   |                                                                                                                                                                    | 350    |                                                                                                                                                                                     |   | (450                                                                                                                                                                          | )      |                                                                                                                                                                          | (225   | ) |   | 69 |   |
|                                                                                                                                                                 |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |   |   |   |   |
|                Net interest income after (recovery                of) |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |   |   |   |   |
|                     provision for loan losses     |   |                                                                                                                                                                    | 9,426  |                                                                                                                                                                                     |   | 9,181                                                                                                                                                                         |   |                                                                                                                                                                          | 19,393 |   |   | 16,748 |   |
|                                                                                                                                                                 |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |   |   |   |   |
| Other operating income                                                                                                                                     |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |   |   |   |   |
|      Service charges on deposit accounts                                                                                |   |                                                                                                                                                                    | 680    |                                                                                                                                                                                     |   | 595                                                                                                                                                                           |   |                                                                                                                                                                          | 1,301  |   |   | 1,170 |   |
|      Gain                (loss) on sales of other real estate                owned                                      |   |                                                                                                                                                                    | (1     | )                                                                                                                                                                                        |   | —                                                                                                                                                                       |   |                                                                                                                                                                          | 6      |   |   | — |   |
|      Gains on sales of loans                held-for-sale                                                               |   |                                                                                                                                                                    | 55     |                                                                                                                                                                                     |   | 94                                                                                                                                                                            |   |                                                                                                                                                                          | 92     |   |   | 166 |   |
|      Investment and brokerage services income                                                                           |   |                                                                                                                                                                    | 67     |                                                                                                                                                                                     |   | 95                                                                                                                                                                            |   |                                                                                                                                                                          | 112    |   |   | 165 |   |
|      Mortgage brokerage income                                                                                                    |   |                                                                                                                                                                    | 124    |                                                                                                                                                                                     |   | 115                                                                                                                                                                           |   |                                                                                                                                                                          | 209    |   |   | 183 |   |
|      Loan servicing income                                                                                                        |   |                                                                                                                                                                    | 76     |                                                                                                                                                                                     |   | 100                                                                                                                                                                           |   |                                                                                                                                                                          | 144    |   |   | 187 |   |
|      Fiduciary                activities income                                                                                             |   |                                                                                                                                                                    | 42     |                                                                                                                                                                                     |   | 31                                                                                                                                                                            |   |                                                                                                                                                                          | 75     |   |   | 56 |   |
|      ATM fees                                                                                                                          |   |                                                                                                                                                                    | 64     |                                                                                                                                                                                     |   | 53                                                                                                                                                                            |   |                                                                                                                                                                          | 133    |   |   | 115 |   |
|      Signature                based transaction fees                                                                                        |   |                                                                                                                                                                    | 89     |                                                                                                                                                                                     |   | 65                                                                                                                                                                            |   |                                                                                                                                                                          | 170    |   |   | 128 |   |
|      Other income                                                                                                                      |   |                                                                                                                                                                    | 167    |                                                                                                                                                                                     |   | 198                                                                                                                                                                           |   |                                                                                                                                                                          | 330    |   |   | 394 |   |
|                Total other operating income                                |   |                                                                                                                                                                    | 1,363  |                                                                                                                                                                                     |   | 1,346                                                                                                                                                                         |   |                                                                                                                                                                          | 2,572  |   |   | 2,564 |   |
|                                                                                                                                                                 |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |   |   |   |   |
| Other operating expenses                                                                                                                                   |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |   |   |   |   |
|      Salaries and employee benefits                                                                                          |   |                                                                                                                                                                    | 4,347  |                                                                                                                                                                                     |   | 4,056                                                                                                                                                                         |   |                                                                                                                                                                          | 8,890  |   |   | 7,829 |   |
|      Occupancy and equipment                                                                                                      |   |                                                                                                                                                                    | 885    |                                                                                                                                                                                     |   | 845                                                                                                                                                                           |   |                                                                                                                                                                          | 1,740  |   |   | 1,682 |   |
|      Data processing                                                                                                                   |   |                                                                                                                                                                    | 385    |                                                                                                                                                                                     |   | 283                                                                                                                                                                           |   |                                                                                                                                                                          | 714    |   |   | 584 |   |
|      Stationery and supplies                                                                                                      |   |                                                                                                                                                                    | 117    |                                                                                                                                                                                     |   | 139                                                                                                                                                                           |   |                                                                                                                                                                          | 240    |   |   | 254 |   |
|      Advertising                                                                                                                            |   |                                                                                                                                                                    | 233    |                                                                                                                                                                                     |   | 196                                                                                                                                                                           |   |                                                                                                                                                                          | 449    |   |   | 293 |   |
|      Directors’ fees                                                                                                             |   |                                                                                                                                                                    | 32     |                                                                                                                                                                                     |   | 29                                                                                                                                                                            |   |                                                                                                                                                                          | 66     |   |   | 57 |   |
|      Other expense                                                                                                                     |   |                                                                                                                                                                    | 1,142  |                                                                                                                                                                                     |   | 1,281                                                                                                                                                                         |   |                                                                                                                                                                          | 2,369  |   |   | 2,498 |   |
|                Total other operating expenses                              |   |                                                                                                                                                                    | 7,141  |                                                                                                                                                                                     |   | 6,829                                                                                                                                                                         |   |                                                                                                                                                                          | 14,468 |   |   | 13,197 |   |
|                                                                                                                                                                 |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |   |   |   |   |
|                Income before income tax expense                       |   |                                                                                                                                                                    | 3,648  |                                                                                                                                                                                     |   | 3,698                                                                                                                                                                         |   |                                                                                                                                                                          | 7,497  |   |   | 6,115 |   |
| Provision for income taxes                                                                                                                            |   |                                                                                                                                                                    | 1,354  |                                                                                                                                                                                     |   | 1,375                                                                                                                                                                         |   |                                                                                                                                                                          | 2,801  |   |   | 2,100 |   |
|                                                                                                                                                                 |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |   |   |   |   |
|                Net income                                                            |   | $                                                                                                                                                                       | 2,294  |                                                                                                                                                                                     | $      | 2,323                                                                                                                                                                         |   | $                                                                                                                                                                             | 4,696  |   | $ | 4,015 |   |
|                                                                                                                                                                 |   |                                                                                                                                                                    |   |                                                                                                                                                                                     |   |                                                                                                                                                                          |   |                                                                                                                                                                          |   |   |   |   |   |
| Basic Income per share                                                                                                                           |   | $                                                                                                                                                                       | 0.29   |                                                                                                                                                                                     | $      | 0.29                                                                                                                                                                          |   | $                                                                                                                                                                             | 0.59   |   | $ | 0.50 |   |
| Diluted Income per share                                                                                                                              |   | $                                                                                                                                                                       | 0.28   |                                                                                                                                                                                     | $      | 0.28                                                                                                                                                                          |   | $                                                                                                                                                                             | 0.57   |   | $ | 0.48 |   |

----

***Unaudited      Condensed Consolidated Statement of Stockholders' Equity and Comprehensive      Income***

| (in                thousands, except share amounts)                                                                                               |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                              |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   | Additional |   |   |   | Other |   |   |   |
|                                                                                                                                              |   | Common                Stock |   | Comprehensive |   | Paid-in |   | Retained |   | Comprehensive |   |   |   |
| Description                                                                                                                                       |   | Shares |   | Amounts |   | Income |   | Capital |   | Earnings |   | Income                / (Loss) |   | Total |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at December 31, 2005                                                                                                       |   |   | 7,558,759 |   | $ | 36,100 |   |   |   |   | $ | 977 |   | $ | 19,606 |   | $ | 119 |   | $ | 56,802 |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                income:                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                         |   |   |   |   |   |   |   | $ | 4,696 |   |   |   |   |   | 4,696 |   |   |   |   |   | 4,696 |   |
| Other                comprehensive loss:                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                holding losses on securities arising during the current period, net                of tax                effect of $387 |   |   |   |   |   |   |   |   | (580 | ) |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification                adjustment due to gains realized on sales of securities, net of tax                effect                of $0    |   |   |   |   |   |   |   |   | — |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                other comprehensive loss, net of tax effect of $387                                                                          |   |   |   |   |   |   |   |   | (580 | ) |   |   |   |   |   |   |   | (580 | ) |   | (580 | ) |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive                income                                                                                                               |   |   |   |   |   |   |   | $ | 4,116 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 6%                stock dividend                                                                                                                  |   |   | 455,472 |   |   | 12,525 |   |   |   |   |   |   |   |   | (12,525 | ) |   |   |   |   | — |   |
| Cash                in lieu of fractional shares                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (15 | ) |   |   |   |   | (15 | ) |
| Stock-based                compensation and related tax benefits                                                                                  |   |   |   |   |   | 497 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 497 |   |
| Stock                options exercised, net of swapped shares                                                                                     |   |   | 81,425 |   |   | 137 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 137 |   |
| Stock                repurchase and retirement                                                                                                    |   |   | (107,606 | ) |   | (2,963 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   | (2,963 | ) |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                at June 30, 2006                                                                                                           |   |   | 7,988,050 |   | $ | 46,296 |   |   |   |   | $ | 977 |   | $ | 11,762 |   | $ | (461 | ) | $ | 58,574 |   |

----

***UNAUDITED      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS***

|                                                                                                                                                                                            |   | Six                months Ended June                30, 2006 |    | Six                months Ended June                30, 2005 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|--------------------------------------------------------------|--------|
| **Operating                Activities**                                                                                                                                                         |   |                                                         |    |                                                         |   |
|           Net Income                                                                                                                     |   | $                                                            | 4,696   |                                                         | $      | 4,015 |   |
|           Adjustments to reconcile net income to net                                                            |   |                                                         |    |                                                         |   |   |   |
|  cash provided by operating activities:                                                                                                                                |   |                                                         |    |                                                         |   |   |   |
| Depreciation                                                                                                                                                                                    |   |                                                         | 508     |                                                         |   | 509 |   |
| (Recovery                of) provision for loan losses                                                                                                                                          |   |                                                         | (225    | )                                                            |   | 69 |   |
| Stock                plan accruals                                                                                                                                                              |   |                                                         | 190     |                                                         |   | 143 |   |
| Tax                benefit for stock options                                                                                                                                                    |   |                                                         | 307     |                                                         |   | — |   |
| Gains                on sales of loans                                                                                                                                                          |   |                                                         | (92     | )                                                            |   | (166 | ) |
| Gains                on sales of other real estate owned                                                                                                                                        |   |                                                         | (6      | )                                                            |   | — |   |
| Proceeds                from sales of loans held-for-sale                                                                                                                                       |   |                                                         | 15,936  |                                                         |   | 26,894 |   |
| Originations                of loans held-for-sale                                                                                                                                              |   |                                                         | (16,499 | )                                                            |   | (27,848 | ) |
| Increase                in accrued interest receivable and other assets                                                                                                                         |   |                                                         | (2,337  | )                                                            |   | (1,733 | ) |
| (Decrease)                increase in accrued interest payable and other liabilities                                                                                                            |   |                                                         | (1,256  | )                                                            |   | 578 |   |
|                     Net cash provided by operating activities      |   |                                                         | 1,222   |                                                         |   | 2,461 |   |
|                                                                                                                                                                                            |   |                                                         |    |                                                         |   |   |   |
| **Investing Activities**                                                                                                                                                                   |   |                                                         |    |                                                         |   |   |   |
|           Net (increase) decrease in investment securities                                                           |   |                                                         | (20,904 | )                                                            |   | 4,766 |   |
|           Net increase in loans                                                                                                |   |                                                         | (23,887 | )                                                            |   | (20,184 | ) |
|           Net                decrease (increase) in other real estate owned                                                              |   |                                                         | 274     |                                                         |   | (3,226 | ) |
|           Purchases of premises and equipment, net                                                                   |   |                                                         | (315    | )                                                            |   | (481 | ) |
|                     Net cash used in investing activities          |   |                                                         | (44,832 | )                                                            |   | (19,125 | ) |
|                                                                                                                                                                                            |   |                                                         |    |                                                         |   |   |   |
| **Financing Activities**                                                                                                                                                                   |   |                                                         |    |                                                         |   |   |   |
|           Net                (decrease) increase in deposits                                                                   |   |                                                         | (5,317  | )                                                            |   | 1,068 |   |
|           Net decrease in FHLB advances                                                                                   |   |                                                         | (3,312  | )                                                            |   | (443 | ) |
|           Cash dividends paid                                                                                                       |   |                                                         | (15     | )                                                            |   | (16 | ) |
|           Proceeds                from stock options exercised                                                                 |   |                                                         | 137     |                                                         |   | 96 |   |
| Tax                benefit for stock options                                                                                                                                                    |   |                                                         | (307    | )                                                            |   | — |   |
|           Repurchase of stock                                                                                                       |   |                                                         | (2,963  | )                                                            |   | (1,808 | ) |
|                     Net cash used in financing activities          |   |                                                         | (11,777 | )                                                            |   | (1,103 | ) |
|                                                                                                                                                                                  |   |                                                         |    |                                                         |   |   |   |
|                     Net decrease in cash and cash equivalents |   |                                                         | (55,387 | )                                                            |   | (17,767 | ) |
| Cash and cash equivalents at beginning of period                                                                                                             |   |                                                         | 122,692 |                                                         |   | 116,704 |   |
| Cash and cash equivalents at end of period                                                                                                                   |   | $                                                            | 67,305  |                                                         | $      | 98,937 |   |
|                                                                                                                                                                                            |   |                                                         |    |                                                         |   |   |   |
| Supplemental disclosures of cash flow information:                                                                                                                     |   |                                                         |    |                                                         |   |   |   |
| Cash paid during the period for:                                                                                                                                       |   |                                                         |    |                                                         |   |   |   |
|                     Interest                                                                |   | $                                                            | 4,025   |                                                         | $      | 2,364 |   |
|                     Income Taxes                                                       |   | $                                                            | 3,435   |                                                         | $      | 3,036 |   |
|                                                                                                                                                                                            |   |                                                         |    |                                                         |   |   |   |
| Supplemental disclosures of non-cash investing and financing activities:                                                                                     |   |                                                         |    |                                                         |   |   |   |
| Stock dividend distributed                                                                                                                                                            |   | $                                                            | 12,525  |                                                         | $      | 6,158 |   |

----

*NOTES      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS*

| 1. | BASIS                OF PRESENTATION |
|----|--------------------------------------|

*Reclassifications*

----

| 2. | ALLOWANCE                FOR LOAN LOSSES |
|----|------------------------------------------|

|                                                   |   | (in                thousands)                           |   |
|--------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                   |   |                                                    |   |   |   |
|                                                   |   | Six                months ended June                30, |   | Year                ended December 31, |   |
|                                                   |   | 2006                                                    |   | 2005 |   | 2005 |   |
| Balance,                beginning of period            |   | $                                                       | 7,917  |   | $ | 7,445 |   | $ | 7,445 |   |
| (Recovery                of) provision for loan losses |   |                                                    | (225   | ) |   | 69 |   |   | 600 |   |
| Loan                charge-offs                        |   |                                                    | (324   | ) |   | (73 | ) |   | (855 | ) |
| Loan                recoveries                         |   |                                                    | 555    |   |   | 635 |   |   | 727 |   |
| Balance,                end of period                  |   | $                                                       | 7,923  |   | $ | 8,076 |   | $ | 7,917 |   |

| 3. | MORTGAGE                OPERATIONS |
|----|------------------------------------|

|                                     |   | (in                thousands)    |   |
|------------------------------------------|--------|----------------------------------|--------|
|                                     |   |                             |   |   |   |   |   |   |   |
|                                     |   | December                31, 2005 |   | Additions |   | Reductions |   | June                30, 2006 |   |
| Mortgage                servicing rights |   | $                                | 973    |   | $ | 75 |   | $ | 75 |   | $ | 973 |   |

----

| 4. | OUTSTANDING                SHARES AND EARNINGS PER SHARE |
|----|----------------------------------------------------------|

| (amounts                in thousands, except share and earnings per share amounts) |   |
|------------------------------------------------------------------------------------|--------|
|                                                                               |   | Three                months ended June 30, |   | Six                months ended June 30, |   |
|                                                                               |   | 2006 |   | 2005 |   | 2006 |   | 2005 |   |
| Basic                earnings per share:                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                          |   |  $ | 2,294 |   |  $ | 2,323 |   | $  | 4,696 |   |  $ | 4,015 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding                          |   |   | 7,991,102 |   |   | 8,080,125 |   |   | 8,009,246 |   |   | 8,091,420 |   |
| Basic                EPS                                                           |   |  $ | 0.29 |   |  $ | 0.                29 |   |  $ | 0.59 |   |  $ | 0.                50 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                earnings per share:                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                          |   |  $ | 2,294 |   |  $ | 2,323 |   |  $ | 4,696 |   |  $ | 4,015 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding                          |   |   | 7,991,102 |   |   | 8,080,125 |   |   | 8,009,246 |   |   | 8,091,420 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                of dilutive options                                          |   |   | 288,116 |   |   | 346,854 |   |   | 297,327 |   |   | 304,526 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   |   | 8,279,218 |   |   | 8,426,979 |   |   | 8,306,573 |   |   | 8,395,946 |   |
| Diluted                EPS                                                         |   |  $ | 0.28 |   |  $ | 0.28 |   |  $ | 0.57 |   |  $ | 0.48 |   |

----

| 5. | STOCK                OPTION PLAN |
|----|----------------------------------|

*Accounting      for Stock-Based *
*Compensation      *
*-*
*      Transition and Disclosure*
*,      an      amendment of FASB Statement No. 123*

| (dollars                in thousands, except earnings per share amounts)                                                                                                                                |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                    |   |
|                                                                                                                                                                                                    |   | Three                months ended June                30, |   | Six                months ended June 30, |   |
|                                                                                                                                                                                                    |   | 2005 |   | 2005 |   |
|                                                                                                                                                                                                    |   |   |   |   |   |
| Net                income, as reported                                                                                                                                                                  |   | $ | 2,323 |   | $ | 4,015 |   |
|                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Add:                Stock-based employee compensation expense included in reported net                income,                net of related tax effects                                                 |   |   | 71 |   |   | 143 |   |
|                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Deduct:                Total stock-based employee compensation expense determined under                fair                value based method for all awards, net of related tax                effects |   |   | (89 | ) |   | (179 | ) |
|                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Pro                forma net income under SFAS No. 123                                                                                                                                                  |   | $ | 2,305 |   | $ | 3,979 |   |
|                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Basic                earnings per share:                                                                                                                                                                |   |   |   |   |   |   |   |
| As                reported                                                                                                                                                                              |   | $ | 0.29 |   | $ | 0.50 |   |
| Pro                forma under SFAS No. 123                                                                                                                                                             |   | $ | 0.29 |   | $ | 0.49 |   |
|                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Diluted                earnings per share:                                                                                                                                                              |   |   |   |   |   |   |   |
| As                reported                                                                                                                                                                              |   | $ | 0.28 |   | $ | 0.48 |   |
| Pro                forma under SFAS No. 123                                                                                                                                                             |   | $ | 0.27 |   | $ | 0.47 |   |

----

|                                                      |   | Number                of Shares |    | Weighted                Average Exercise Price |   | Aggregate                Intrinsic Value |   | Weighted                Average Remaining Contractual Term |      |
|-----------------------------------------------------------|--------|---------------------------------|---------|------------------------------------------------|--------|------------------------------------------|--------|------------------------------------------------------------|-----------|
| Options                outstanding at Beginning of Period |   |                            | 572,960 |                                           | $      | 10.34                                    |   |                                                       |      |   |   |   |   |
|                                                      |   |                            |    |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Granted                                                   |   |                            | 8,500   |                                           |   | 27.57                                    |   |                                                       |      |   |   |   |   |
|                                                      |   |                            |    |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Cancelled                / Forfeited                      |   |                            | (1      | )                                              |   | 9.31                                     |   |                                                       |      |   |   |   |   |
|                                                      |   |                            |    |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Exercised                                                 |   |                            | (41,177 | )                                              |   | 7.39                                     |   | $                                                          | 826,210   |   |   |   |   |
|                                                      |   |                            |    |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Options                outstanding at End of Period       |   |                            | 540,282 |                                           | $      | 10.84                                    |   | $                                                          | 8,338,760 |   |   | 6.37 |   |
|                                                      |   |                            |    |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Exercisable                (vested) at End of Period      |   |                            | 356,350 |                                           | $      | 8.11                                     |   | $                                                          | 6,463,235 |   |   | 5.30 |   |

|                                                      |   | Number                of Shares |     | Weighted                Average Exercise Price |   | Aggregate                Intrinsic Value |   | Weighted                Average Remaining Contractual Term |      |
|-----------------------------------------------------------|--------|---------------------------------|----------|------------------------------------------------|--------|------------------------------------------|--------|------------------------------------------------------------|-----------|
| Options                outstanding at Beginning of Period |   |                            | 602,696  |                                           | $      | 8.84                                     |   |                                                       |      |   |   |   |   |
|                                                      |   |                            |     |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Granted                                                   |   |                            | 57,790   |                                           |   | 24.98                                    |   |                                                       |      |   |   |   |   |
|                                                      |   |                            |     |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Cancelled                / Forfeited                      |   |                            | (10,425  | )                                              |   | 10.48                                    |   |                                                       |      |   |   |   |   |
|                                                      |   |                            |     |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Exercised                                                 |   |                            | (109,779 | )                                              |   | 7.33                                     |   | $                                                          | 2,062,200 |   |   |   |   |
|                                                      |   |                            |     |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Options                outstanding at End of Period       |   |                            | 540,282  |                                           | $      | 10.84                                    |   | $                                                          | 8,338,760 |   |   | 6.37 |   |
|                                                      |   |                            |     |                                           |   |                                     |   |                                                       |      |   |   |   |   |
| Exercisable                (vested) at End of Period      |   |                            | 356,350  |                                           | $      | 8.11                                     |   | $                                                          | 6,463,235 |   |   | 5.30 |   |

----

|                                     | Three                Months Ended June 30, 2006 | Six                Months Ended June 30, 2006 |
|------------------------------------------|-------------------------------------------------|-----------------------------------------------|
| Risk                Free Interest Rate   | 4.57%                                           | 4.57%                                         |
|                                     |                                            |                                          |
| Expected                Dividend Yield   | 0.00%                                           | 0.00%                                         |
|                                     |                                            |                                          |
| Expected                Life in Years    | 5.00                                            | 4.67                                          |
|                                     |                                            |                                          |
| Expected                Price Volatility | 26.53%                                          | 26.39%                                        |

----

|                                     | Three                Months Ended June 30, 2006 | Six                Months Ended June 30, 2006 |
|------------------------------------------|-------------------------------------------------|-----------------------------------------------|
| Risk                Free Interest Rate   | 1.36%                                           | 1.36%                                         |
|                                     |                                            |                                          |
| Expected                Dividend Yield   | 0.00%                                           | 0.00%                                         |
|                                     |                                            |                                          |
| Expected                Life in Years    | 2.00                                            | 2.00                                          |
|                                     |                                            |                                          |
| Expected                Price Volatility | 23.80%                                          | 23.80%                                        |

----

| 6. | FIRST                NORTHERN BANK - EXECUTIVE SALARY CONTINUATION                PLAN |
|----|----------------------------------------------------------------------------------------|

|                                                   |   | Three                months ended June 30, |   |
|--------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                   |   | 2006                                       |   | 2005 |   |
| Components                of Net Periodic Benefit Cost |   |                                       |   |   |   |   |   |
| Service                Cost                            |   | $                                          | 41,146 |   | $ | 40,049 |   |
| Interest                Cost                           |   |                                       | 16,155 |   |   | 13,321 |   |
| Amortization                of prior service cost      |   |                                       | 3,257  |   |   | 3,257 |   |
| Net                periodic benefit cost               |   | $                                          | 60,558 |   | $ | 56,627 |   |

| 7.                                  | FIRST                NORTHERN BANK - DIRECTORS’ RETIREMENT                PLAN |
|------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|

|                                                   |   | Three                months ended June 30, |   |
|--------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                   |   | 2006                                       |   | 2005 |   |
| Components                of Net Periodic Benefit Cost |   |                                       |   |   |   |   |   |
| Service                Cost                            |   | $                                          | 13,518 |   |  $ | 18,218 |   |
| Interest                Cost                           |   |                                       | 5,943  |   |   | 5,233 |   |
| Amortization                of net loss                |   |                                       | 234    |   |   | 1,295 |   |
| Net                periodic benefit cost               |   | $                                          | 19,695 |   |  $ | 24,746 |   |

----

**ITEM      2.**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF**

**FINANCIAL      CONDITION AND RESULTS OF OPERATIONS**

**FORWARD-LOOKING      STATEMENTS**

----

**INTRODUCTION**

| ·   | Year-to-date                net income of $4.70 million, up 16.9% over the $4.02 million earned                in the                same fiscal period last year. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Diluted                earnings per share for the six months ended June 30, 2006 of $0.57,                up                18.8% from the $0.48 reported in the same period last year (all 2005                per                share earnings have been adjusted for a 6% stock dividend issued                March 31,                2006). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Annualized                Return on Average Assets for the six-month period ended June 30,                2006 of                1.41%, compared to 1.27% for the same period in 2005. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Annualized                Return on Beginning Core Equity for the six-month period ended June                30,                2006 of 16.57%, compared to 15.77% one year ago. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Total                assets at June 30, 2006 of $652.5 million, an increase of $20.8 million,                or 3.3% from prior-year second quarter levels. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Total                deposits of $576.5 million at June 30, 2006, an increase of $18.2                million                or 3.3% compared to June 30, 2005 figures. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Total                net loans at June 30, 2006 (including loans held-for-sale) increased                $32.9                million, or 7.3%, to $485.3 million compared to June 30, 2005                figures. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net                income for the quarter of $2.29 million, down 1.3% from the $2.32                million                earned in the second quarter of 2005. (Second quarter 2005 net income                was                increased through a $265 thousand, net of tax, recovery of provision                for                loan losses from a prior period.) |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Diluted                earnings per share for the quarter of $0.28, which matched the $0.28                per                diluted share earned a year ago. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SUMMARY**

|    | ( in                thousands, except earnings per share and percentage                amounts) |                         |
|---------|------------------------------------------------------------------------------------------------------|------------------------------|
|  . |                                                                                                 |                         |   | Three                months | Three                months | Six                months | Six                months |
|    |                                                                                                 |                         |   | ended | ended |   | ended |   |   | ended |   |
|    |                                                                                                 | June                30, 2006 | June                30, 2005 | June                30, 2006 | June                30, 2005 |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    | For                the Period:                                                                       |                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    | Net                Income                                                                            |                         |   | $ | 2,294 |   | $ | 2,323 |   | $ | 4,696                  |   | $ | 4,015 |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    |  Basic                Income Per Share*                                                         | $                            | 0.29 |   | $ | 0.29 |   | $ | 0.59 |   | $  | 0.50 |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    | Diluted                Income Per share*                                                             | $                            | 0.28 |   | $ | 0.28 |   | $ | 0.57 |   | $  | 0.48 |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |
|    | Return                on Average Assets                                                              |                         | 1.39% |   |   | 1.46% |   |   | 1.41% |   |   | 1.27% |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    | Net                Earnings / Beginning Equity                                                       |                         | 16.19% |   |   | 18.25% |   |   | 16.57% |   |   | 15.77%  |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    | At                Period End:                                                                        |                         |   |   |   |   |   |   |   |   |   |   |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |
|    | Total                Assets                                                                          | $                            | 652,534 |   | $ | 631,732 |   | $ | 652,534 |   | $  | 631,732 |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |
|    |  Total                Loans, Net (including loans held-for-sale)                                | $                            | 485,268 |   | $ | 452,412 |   | $  | 485,268 |   | $  | 452,412 |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    | Total                Deposits                                                                        | $                            |                     576,464 |   | $ | 558,254 |   | $  | 576,464  |   | $  | 558,254  |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |
|    |  Loan-To-Deposit                Ratio                                                           | 84.2%                        |   |   | 81.0% |   |   | 84.2% |   |   | 81.0% |   |
|    |                                                                                                 |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    | *Adjusted                for stock dividends                                                         |                         |   |   |   |   |   |   |   |   |   |

----

**Distribution      of Average Statements of Condition and Analysis of Net Interest      Income**

|                                                                                                                                                                                                      |   | Three                months ended June 30, 2006                                                                                                                                  |                                                                                                                                                               | Three                months ended June 30, 2005 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|--------|
|                                                                                                                                                                                                      |   | Average                                                                                                                                                                          |                                                                                                                                                               |                                            |   | Yield/ |   | Average |   |   |   | Yield/ |   |
|                                                                                                                                                                                                      |   | Balance                                                                                                                                                                          |                                                                                                                                                               | Interest                                        |   | Rate |   | Balance |   | Interest |   | Rate |   |
| **Assets**                                                                                                                                                                                                |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |
| Interest-earning                assets:                                                                                                                                                                   |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                (1)                                                                                                                                                                                  |   | $                                                                                                                                                                                | 480,263                                                                                                                                                            |                                            | $      | 10,436 |   |   | 8.72 | % | $ |                               58,760 |   | $ | 8,895 |   |   | 7.78 | % |
| Investment                securities, taxable                                                                                                                                                             |   |                                                                                                                                                                             | 54,746                                                                                                                                                             |                                            |   | 667 |   |   | 4.89 | % |   | 40,196 |   |   | 504 |   |   | 5.03 | % |
| Investment                securities, non-taxable (2)                                                                                                                                                     |   |                                                                                                                                                                             | 12,085                                                                                                                                                             |                                            |   | 143 |   |   | 4.75 | % |   | 11,971 |   |   | 144 |   |   | 4.82 | % |
| Federal                funds sold                                                                                                                                                                         |   |                                                                                                                                                                             | 53,872                                                                                                                                                             |                                            |   | 651 |   |   | 4.85 | % |   | 68,042 |   |   | 479 |   |   | 2.82 | % |
| Total                interest-earning assets                                                                                                                                                              |   |                                                                                                                                                                             | 600,966                                                                                                                                                            |                                            |   | 11,897 |   |   | 7.94 | % |   | 578,969 |   |   | 10,022 |   |   | 6.94 | % |
| Non-interest-earning                assets:                                                                                                                                                               |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and due from banks                                                                                                                                                                    |   |                                                                                                                                                                             | 29,221                                                                                                                                                             |                                            |   |   |   |   |   |   |   | 31,093 |   |   |   |   |   |   |   |
| Premises                and equipment, net                                                                                                                                                                |   |                                                                                                                                                                             | 8,178                                                                                                                                                              |                                            |   |   |   |   |   |   |   | 7,523 |   |   |   |   |   |   |   |
| Other                real estate owned                                                                                                                                                                    |   |                                                                                                                                                                             | —                                                                                                                                                            |                                            |   |   |   |   |   |   |   | 106 |   |   |   |   |   |   |   |
| Accrued                interest receivable and other assets                                                                                                                                               |   |                                                                                                                                                                             | 20,346                                                                                                                                                             |                                            |   |   |   |   |   |   |   | 17,418 |   |   |   |   |   |   |   |
| Total                average assets                                                                                                                                                                       |   |                                                                                                                                                                             | 658,711                                                                                                                                                            |                                            |   |   |   |   |   |   |   | 635,172 |   |   |   |   |   |   |   |
|                                                                                                                                                                                                      |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Liabilities                and Stockholders’ Equity:**                                                                                                                                            |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:                                                                                                                                                              |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                transaction deposits                                                                                                                                                      |   |                                                                                                                                                                             | 88,222                                                                                                                                                             |                                            |   | 263 |   |   | 1.20 | % |   | 67,439 |   |   | 101 |   |   | .60 | % |
| Savings                & MMDA’s                                                                                                                                                                 |   |                                                                                                                                                                             | 190,068                                                                                                                                                            |                                            |   | 876 |   |   | 1.85 | % |   | 194,037 |   |   | 521 |   |   | 1.08 | % |
| Time,                under $100,000                                                                                                                                                                       |   |                                                                                                                                                                             | 50,710                                                                                                                                                             |                                            |   | 333 |   |   | 2.63 | % |   | 55,654 |   |   | 223 |   |   | 1.61 | % |
| Time,                $100,000 and over                                                                                                                                                                    |   |                                                                                                                                                                             | 69,578                                                                                                                                                             |                                            |   | 567 |   |   | 3.27 | % |   | 65,156 |   |   | 321 |   |   | 1.98 | % |
| FHLB                advances and other borrowings                                                                                                                                                         |   |                                                                                                                                                                             | 10,959                                                                                                                                                             |                                            |   | 82 |   |   | 3.00 | % |   | 14,209 |   |   | 124 |   |   | 3.50 | % |
| Total                interest-bearing liabilities                                                                                                                                                         |   |                                                                                                                                                                             | 409,537                                                                                                                                                            |                                            |   | 2,121 |   |   | 2.08 | % |   | 396,495 |   |   | 1,290 |   |   | 1.30 | % |
| Non-interest-bearing                liabilities:                                                                                                                                                          |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing                demand deposits                                                                                                                                                       |   |                                                                                                                                                                             | 186,155                                                                                                                                                            |                                            |   |   |   |   |   |   |   | 181,114 |   |   |   |   |   |   |   |
| Accrued                interest payable and other liabilities                                                                                                                                             |   |                                                                                                                                                                             | 5,172                                                                                                                                                              |                                            |   |   |   |   |   |   |   | 4,089 |   |   |   |   |   |   |   |
| Total                liabilities                                                                                                                                                                          |   |                                                                                                                                                                             | 600,864                                                                                                                                                            |                                            |   |   |   |   |   |   |   | 581,698 |   |   |   |   |   |   |   |
| Total                stockholders’ equity                                                                                                                                                           |   |                                                                                                                                                                             | 57,847                                                                                                                                                             |                                            |   |   |   |   |   |   |   | 53,474 |   |   |   |   |   |   |   |
| Total                average liabilities and stockholders’ equity                                                                                                                                   |   | $                                                                                                                                                                                | 658,711                                                                                                                                                            |                                            |   |   |   |   |   |   | $ | 635,172 |   |   |   |   |   |   |   |
| Net                interest income and net interest margin (3)                                                                                                                                            |   |                                                                                                                                                                             |                                                                                                                                                               |                                            | $      | 9,776 |   |   | 6.52 | % |   |   |   | $ | 8,732 |   |   | 6.05 | % |
|                                                                                                                                                                                                      |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                      |   |                                                                                                                                                                             |                                                                                                                                                               |
|                                                                                                                                                                                                      |   | Six              months ended June 30,              2006                     | Six                months ended June 30,                2005                  |
|                                                                                                                                                                                                      |   |                                                                                                                                                                             | Average                                                                                                                                                       |                                            |   |   |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                                                                                                                                                                                                      |   |                                                                                                                                                                             | Balance                                                                                                                                                       |                                            |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| **Assets**                                                                                                                                                                                                |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning                assets:                                                                                                                                                                   |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                (1)                                                                                                                                                                                  |   | $                                                                                                                                                                                | 471,453                                                                                                                                                            |                                            | $      | 20,119 |   |   | 8.61 | % | $ | 448,002 |   | $ | 16,917 |   |   | 7.61 | % |
| Investment                securities, taxable                                                                                                                                                             |   |                                                                                                                                                                             | 50,673                                                                                                                                                             |                                            |   | 1,223 |   |   | 4.87 | % |   | 41,173 |   |   | 1,037 |   |   | 5.08 | % |
| Investment                securities, non-taxable (2)                                                                                                                                                     |   |                                                                                                                                                                             | 11,539                                                                                                                                                             |                                            |   | 274 |   |   | 4.79 | % |   | 12,184 |   |   | 291 |   |   | 4.82 | % |
| Federal                funds sold                                                                                                                                                                         |   |                                                                                                                                                                             | 71,489                                                                                                                                                             |                                            |   | 1,611 |   |   | 4.54 | % |   | 73,648 |   |   | 931 |   |   | 2.55 | % |
| Total                interest-earning assets                                                                                                                                                              |   |                                                                                                                                                                             | 605,154                                                                                                                                                            |                                            |   | 23,227 |   |   | 7.74 | % |   | 575,007 |   |   | 19,176 |   |   | 6.73 | % |
| Non-interest-earning                assets:                                                                                                                                                               |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and due from banks                                                                                                                                                                    |   |                                                                                                                                                                             | 30,589                                                                                                                                                             |                                            |   |   |   |   |   |   |   | 32,459 |   |   |   |   |   |   |   |
| Premises                and equipment, net                                                                                                                                                                |   |                                                                                                                                                                             | 8,216                                                                                                                                                              |                                            |   |   |   |   |   |   |   | 7,531 |   |   |   |   |   |   |   |
| Other                real estate owned                                                                                                                                                                    |   |                                                                                                                                                                             | 115                                                                                                                                                                |                                            |   |   |   |   |   |   |   | 54 |   |   |   |   |   |   |   |
| Accrued                interest receivable and other assets                                                                                                                                               |   |                                                                                                                                                                             | 19,951                                                                                                                                                             |                                            |   |   |   |   |   |   |   | 17,219 |   |   |   |   |   |   |   |
| Total                average assets                                                                                                                                                                       |   |                                                                                                                                                                             | 664,025                                                                                                                                                            |                                            |   |   |   |   |   |   |   | 632,270 |   |   |   |   |   |   |   |
|                                                                                                                                                                                                      |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Liabilities                and Stockholders’ Equity:**                                                                                                                                            |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:                                                                                                                                                              |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                transaction deposits                                                                                                                                                      |   |                                                                                                                                                                             | 86,654                                                                                                                                                             |                                            |   | 478 |   |   | 1.11 | % |   | 66,979 |   |   | 157 |   |   | .47 | % |
| Savings                & MMDA’s                                                                                                                                                                 |   |                                                                                                                                                                             | 192,721                                                                                                                                                            |                                            |   | 1,658 |   |   | 1.73 | % |   | 193,900 |   |   | 886 |   |   | .92 | % |
| Time,                under $100,000                                                                                                                                                                       |   |                                                                                                                                                                             | 51,010                                                                                                                                                             |                                            |   | 642 |   |   | 2.54 | % |   | 56,246 |   |   | 432 |   |   | 1.55 | % |
| Time,                $100,000 and over                                                                                                                                                                    |   |                                                                                                                                                                             | 68,549                                                                                                                                                             |                                            |   | 1,065 |   |   | 3.13 | % |   | 68,498 |   |   | 636 |   |   | 1.87 | % |
| FHLB                advances and other borrowings                                                                                                                                                         |   |                                                                                                                                                                             | 12,079                                                                                                                                                             |                                            |   | 216 |   |   | 3.61 | % |   | 14,391 |   |   | 248 |   |   | 3.48 | % |
| Total                interest-bearing liabilities                                                                                                                                                         |   |                                                                                                                                                                             | 411,013                                                                                                                                                            |                                            |   | 4,059 |   |   | 1.99 | % |   | 400,014 |   |   | 2,359 |   |   | 1.19 | % |
| Non-interest-bearing                liabilities:                                                                                                                                                          |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing                demand deposits                                                                                                                                                       |   |                                                                                                                                                                             | 190,009                                                                                                                                                            |                                            |   |   |   |   |   |   |   | 175,831 |   |   |   |   |   |   |   |
| Accrued                interest payable and other liabilities                                                                                                                                             |   |                                                                                                                                                                             | 5,484                                                                                                                                                              |                                            |   |   |   |   |   |   |   | 3,465 |   |   |   |   |   |   |   |
| Total                liabilities                                                                                                                                                                          |   |                                                                                                                                                                             | 606,506                                                                                                                                                            |                                            |   |   |   |   |   |   |   | 579,310 |   |   |   |   |   |   |   |
| Total                stockholders’ equity                                                                                                                                                           |   |                                                                                                                                                                             | 57,519                                                                                                                                                             |                                            |   |   |   |   |   |   |   | 52,960 |   |   |   |   |   |   |   |
| Total                average liabilities and stockholders’ equity                                                                                                                                   |   | $                                                                                                                                                                                | 664,025                                                                                                                                                            |                                            |   |   |   |   |   |   | $ | 632,270 |   |   |   |   |   |   |   |
| Net                interest income and net interest margin (3)                                                                                                                                            |   |                                                                                                                                                                             |                                                                                                                                                               |                                            | $      | 19,168 |   |   | 6.39 | % |   |   |   | $ | 16,817 |   |   | 5.90 | % |
|                                                                                                                                                                                                      |   |                                                                                                                                                                             |                                                                                                                                                               |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1.                Average balances for loans include loans held-for-sale and non-accrual                loans and are net of the allowance for loan losses, but non-accrued                               |
|                    interest thereon is excluded. Loan interest income includes loan                fees of                approximately $1,430,000 and $1,466,000 for the six months ended |
| June                30, 2006 and 2005, respectively.                                                                                                                                                      |
| 2.                Interest income and yields on tax-exempt securities are not presented                on a                taxable equivalent basis.                                                      |
| 3.                Net interest margin is computed by dividing net interest income by                total                average interest-earning assets.                                                 |

----

**CHANGES      IN FINANCIAL CONDITION**

----

**CHANGES      IN RESULTS OF OPERATIONS**

----

----

|    |                                                           | (in                thousands) |
|---------|----------------------------------------------------------------|-------------------------------|
|    |                                                           |                          |   |   |   |   |   |   |   |   |   |   |   |
|  . |                                                           |                          |   | Three                months | Three                months | Six                months | Six                months |
|    |                                                           |                          |   | ended | ended | ended  | ended  |
|    |                                                           |                          | June                30, 2006 | June                30, 2005 | June                30, 2006 | June                30, 2005 |
|    |                                                           |                          |   |   |   |   |   |   |   |   |   |   |   |
|    | Other                miscellaneous operating expenses          |                          |   |   |   |   |   |   |   |   |   |   |   |
|    | Provision                for unfunded lending commitments      | $                             | (100)  |   | $ | — |   | $ | — |   | $ | 81  |   |
|    | Legal                fees                                      |                          | 98 |   |   | 59 |   |   | 143 |   |   | 88 |   |
|    | Accounting                and audit fees                       |                          | 87 |   |   | 125 |   |   | 252 |   |   | 327 |   |
|    | Consulting                fees                                 |                          |   | 133 |   |   | 135 |   |   | 230 |   |   | 217 |   |
|    | Postage                expenseConsulting                fees   |                          |   | 96 |   |   | 79 |   |   | 188 |   |   | 137 |   |
|    | Telephone                expenseConsulting                fees |                          |   | 46 |   |   | 56 |   |   | 100 |   |   | 109 |   |
|    | Training                expenseConsulting                fees  |                          | 82 |   |   | 65 |   |   | 145 |   |   | 116 |   |
|    | Loan                origination expense                        |                          | 151 |   |   | 221 |   |   | 292 |   |   | 473 |   |
|    | Computer                software depreciation                  |                          | 63 |   |   | 58 |   |   | 129 |   |   | 120 |   |
|    | Other                miscellaneous expense                     |                          | 486 |   |   | 483 |   |   | 890 |   |   | 830 |   |
|    |                                                           |                          |   |   |   |   |   |   |   |   |   |   |   |
|    |                                                           |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    | Total                other miscellaneous operating expenses    | $                             | 1,142 |   | $ | 1,281 |   | $ | 2,369 |   | $ | 2,498 |   |

----

| (Dollars                in thousands)       |   | June                30, 2006 |    | December                31, 2005 |   |
|---------------------------------------------|--------|------------------------------|---------|----------------------------------|--------|
| Undisbursed                loan commitments |   | $                            | 193,572 |                             | $      | 203,101 |   |
| Standby                letters of credit    |   |                         | 14,223  |                             |   | 14,077 |   |
|                                        |   | $                            | 207,795 |                             | $      | 217,178 |   |

----

*See*

----

|                                                                                                      |   | Six                months ended |    | Year                ended   |   |
|-----------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|-----------------------------|--------|
|                                                                                                      |   | June                30,         |    | December                31, |   |
|                                                                                                      |   | 2006                            |    | 2005                        |   | 2005 |   |
| Balance at Beginning of Period                                                        |   | $                               | 7,917   |                        | $      | 7,445 |   | $ | 7,445 |   |
| Provision for Loan Losses                                                                  |   |                            | (225    | )                           |   | 69 |   |   | 600 |   |
| Loans Charged-Off:                                                                                   |   |                            |    |                        |   |   |   |   |   |   |
|    Commercial                                                                              |   |                            | (154    | )                           |   | — |   |   | (670 | ) |
|    Agriculture                                                                             |   |                            | — |                        |   | — |   |   | — |   |
|    Real Estate Mortgage                                                          |   |                            | — |                        |   | — |   |   | — |   |
|    Real Estate Construction                                                      |   |                            | — |                        |   | — |   |   | — |   |
|    Installment Loans to Individuals                                         |   |                            | (170    | )                           |   | (73 | ) |   | (185 | ) |
|                                                                                                      |   |                            |    |                        |   |   |   |   |   |   |
|         Total Charged-Off                                    |   |                            | (324    | )                           |   | (73 | ) |   | (855 | ) |
| Recoveries:                                                                                               |   |                            |    |                        |   |   |   |   |   |   |
|    Commercial                                                                              |   |                            | 480     |                        |   | — |   |   | 64 |   |
|    Agriculture                                                                             |   |                            | — |                        |   | 617 |   |   | 663 |   |
|    Real Estate Mortgage                                                          |   |                            | — |                        |   | — |   |   | — |   |
|    Real Estate Construction                                                      |   |                            | — |                        |   | — |   |   | — |   |
|    Installment Loans to Individuals                                         |   |                            | 75      |                        |   | 18 |   |   | — |   |
|                                                                                                      |   |                            |    |                        |   |   |   |   |   |   |
|         Total Recoveries                                     |   |                            | 555     |                        |   | 635 |   |   | 727 |   |
| Net Recoveries                                                                                  |   |                            | 231     |                        |   | 562 |   |   | (128 | ) |
| Balance at End of Period                                                              |   | $                               | 7,923   |                        | $      | 8,076 |   | $ | 7,917 |   |
| Ratio of Net Recoveries                                                               |   |                            |    |                        |   |   |   |   |   |   |
|    To Average Loans Outstanding During the Period            |   |                            | 0.05    | %                           |   | 0.12 | % |   | (0.03 | %) |
| Allowance for Loan Losses                                                                  |   |                            |    |                        |   |   |   |   |   |   |
|    To Total Loans at the end of the Period         |   |                            | 1.62    | %                           |   | 1.77 | % |   | 1.71 | % |
|    To Nonperforming Loans at the end of the Period |   |                            | 268.94  | %                           |   | 1,139.07 | % |   | 351.71 | % |

----

|                                       |   | (dollars                in thousands) |   |
|--------------------------------------------|--------|---------------------------------------|--------|
|                                       |   |                                  |   |   |   |
|                                       |   | June                30, 2006          |   | December                31, 2005 |   |
| Three                months or less        |   | $                                     | 29,741 |   | $ | 30,401 |   |
| Over                three to twelve months |   |                                  | 34,762 |   |   | 32,129 |   |
| Over                twelve months          |   |                                  | 5,031  |   |   | 3,456 |   |
| Total                                      |   | $                                     | 69,534 |   | $ | 65,986 |   |

|                             |   | Actual  |   | Well                Capitalized Ratio Requirement |   | Minimum |   |
|----------------------------------|--------|---------|--------|---------------------------------------------------|--------|---------|--------|
|                             |   | Capital |   | Ratio                                             |   |    |   | Capital |   |
| Leverage                         |   | $       | 58,004 |                                              |   | 8.78    | %      |   | 5.0 | % |   | 4.0 | % |
| Tier                1 Risk-Based |   | $       | 58,004 |                                              |   | 10.51   | %      |   | 6.0 | % |   | 4.0 | % |
| Total                Risk-Based  |   | $       | 64,619 |                                              |   | 11.71   | %      |   | 10.0 | % |   | 8.0 | % |

|                                                                        |   | Six                months ended June                30, 2006 |   | Six                months ended June                30,2005 |   | Year                ended December                31,2005 |   |
|-----------------------------------------------------------------------------|--------|--------------------------------------------------------------|--------|-------------------------------------------------------------|--------|-----------------------------------------------------------|--------|
| Annualized                return on average assets                          |   |                                                         | 1.41   | %                                                           |   | 1.27                                                      | %      |   | 1.35 | % |
| Annualized                return on beginning core equity*                  |   |                                                         | 16.57  | %                                                           |   | 15.77                                                     | %      |   | 17.06 | % |
|                                                                        |   |                                                         |   |                                                        |   |                                                      |   |   |   |   |
| *                Core equity consisted of $56,683,000 at December 31, 2005. |   |                                                         |   |

----

----

**ITEM      3.**

**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**ITEM      4. **
** **

**CONTROLS      AND PROCEDURES**

**PART      II - OTHER INFORMATION**

**ITEM      1A.**

**RISK      FACTORS**

*Changes      in the premiums payable to the Federal Deposit Insurance Corporation could      increase our costs and adversely affect our business.*

----

**ITEM      2.**

**UNREGISTERED      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

**Repurchases      of Equity Securities**

|                                    |   | (a)                                            |   | (b)                                                       |   | (c)                                                                                                     |   | (d)                                                                                                          |
|-----------------------------------------|--------|------------------------------------------------|--------|-----------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------|
| Period                                  |   | Total                number of sharespurchased |   | Average                pricepaid                per share |   | Number                of shares purchased as part of publicly announcedplans                or programs |   | Maximum                number of shares that may yet be purchased under the plans or                programs |
| April                1 - April 30, 2006 |   | 24,004                                         | $      | 28.56                                                     |   | 24,004                                                                                                  |   | 11,096                                                                                                       |
| May                1 - May 31, 2006     |   | 17,955                                         | $      | 27.78                                                     |   | 17,955                                                                                                  |   | 181,530                                                                                                      |
| June                1 - June 30, 2006   |   | 8,557                                          | $      | 26.95                                                     |   | 8,557                                                                                                   |   | 172,973                                                                                                      |
| Total                                   |   | 50,516                                         | $      | 28.01                                                     |   | 50,516                                                                                                  |   | 172,973                                                                                                      |

----

**ITEM      4. **

**SUBMISSION      OF MATTERS TO A VOTE OF SECURITY HOLDERS**

| Nominee                                                                                                                                            | For       | Against                /Withheld |
|----------------------------------------------------------------------------------------------------------------------------------------------------|-----------|----------------------------------|
| Lori                J. Aldrete                                                                                                                     | 5,781,984 | 61,315                           |
| Frank                J. Andrews, Jr.                                                                                                               | 5,762,659 | 80,640                           |
| John                M. Carbahal                                                                                                                    | 5,827,848 | 15,451                           |
| Gregory                DuPratt                                                                                                                     | 5,829,074 | 14,225                           |
| John                F. Hamel                                                                                                                       | 5,776,310 | 66,989                           |
| Diane                P. Hamlyn                                                                                                                     | 5,781,984 | 61,315                           |
| Foy                S. McNaughton                                                                                                                   | 5,775,446 | 67,853                           |
| Owen                J. Onsum                                                                                                                       | 5,820,900 | 22,399                           |
| David                W. Schulze                                                                                                                    | 5,829,074 | 14,225                           |
|                                                                                                                                               |      |                             |
|                                                                                                                                               |      |                             |
|                                                                                                                                               |      |                             |
| The                vote for ratifying the appointment of Moss Adams LLP as the Company’s                independent auditors was as follows: |      |                             |
|                                                                                                                                               |      |                             |
| For                                                                                                                                                | 5,744,909 |                             |
| Against                                                                                                                                            | 73,334    |                             |
| Abstain                                                                                                                                            | 25,055    |                             |
| Broker                Non-Vote                                                                                                                     | -0-       |                             |

| Approval                of the First Northern Community Bancorp 2006 Stock Incentive                Plan            |      |   |
|---------------------------------------------------------------------------------------------------------------------|-----------|--------|
|                                                                                                                |      |   |
| For                                                                                                                 | 4,408,071 |   |
| Against                                                                                                             | 201,874   |   |
| Abstain                                                                                                             | 50,386    |   |
| Broker                Non-Vote                                                                                      | -0-       |   |
|                                                                                                                |      |   |
| Approval                of the Amended First Northern Community Bancorp Employee Stock Purchase                Plan |      |   |
|                                                                                                                |      |   |
| For                                                                                                                 | 4,534,719 |   |
| Against                                                                                                             | 61,043    |   |
| Abstain                                                                                                             | 64,569    |   |
| Broker                Non-Vote                                                                                      | -0-       |   |

----

**ITEM      6. **

**EXHIBITS**

| **Exhibit** |                                                                                                                                                                                                                                                                                      |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Number**  | **Exhibits**                                                                                                                                                                                                                                                                              |
|        |                                                                                                                                                                                                                                                                                      |
| 10.1        | First                Northern Community Bancorp 2006 Stock Incentive Plan (incorporated                by                reference to Appendix A of the Company’s Definitive Proxy Statement on                Schedule 14A for its 2006 Annual Meeting of Shareholders)            |
| 10.2        | Amended                First Northern Community Bancorp Employee Stock Purchase Plan                (incorporated by reference to Appendix B of the Company’s Definitive Proxy                Statement on Schedule 14A for its 2006 Annual Meeting of                Shareholders) |
| 31.1        | Certification                of the Company’s Chief Executive Officer pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002                                                                                                                                      |
| 31.2        | Certification                of the Company’s Chief Financial Officer pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002                                                                                                                                      |
| 32.1        | Certification                of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                2002                                                                         |
| 32.2        | Certification                of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350,                as                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                2002                                                                         |

**SIGNATURES**

|   |                                 | FIRST                NORTHERN COMMUNITY BANCORP                                                        |
|--------|--------------------------------------|--------------------------------------------------------------------------------------------------------|
|   | Date                                 |                                                                                                   |
|   | August                8, 2006   | By:                /s/ Louise A. Walker                                                                |
|   |                                 | Louise                A. Walker, Sr. Executive Vice President / Chief Financial                Officer |
|   |                                 | (Principal                Financial Officer and Duly Authorized                Officer)                |

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